These 3 Stocks from a Sleepy Industry Have Beaten the Stock Market

The insurance industry is not a sexy industry. But it can boast of some sexy returns for investors.

There are three insurance companies – as categorised by the Global Industry Classification System (GICS) – in the Singapore stock market. A recent report showed how these three companies have generated market-thumping annual returns over the last five years.

Without further ado, here are the trio (data as of 14 November 2016 unless otherwise stated):

  1. Great Eastern Holding Limited  (SGX: G07) is in first place, generating a healthy total return of 79.4% over the last five years. For some perspective, the SPDR STI ETF (SGX: ES3) – an exchange-traded fund that tracks Singapore’s market barometer, the Straits Times Index (SGX: ^STI) – has delivered a total return of just 13.3% in the five years ended 31 October 2016. Great Eastern deals in life assurance and general insurance products. It is also a subsidiary of one of Singapore’s banking giants, Overseas-Chinese Banking Corp Limited (SGX: O39), and it offers a 2.5% dividend yield.
  2. Tied for first place is United Overseas Insurance (SGX: U13), with a five-year total return of 79.4% as well. But unlike Great Eastern, UOI is much smaller (it has ‘only’ S$585 million in total assets as compared to Great Eastern’s S$71 billion) and it deals with property and casualty insurance. The company offers a 3.2% dividend yield.
  3. Finally, we have Singapore Reinsurance Corporation Ltd (SGX: S49), which as its name suggests, is primarily a reinsurer (reinsurers provide insurance products for other insurance companies). The company’s five-year total return might not be as good as the first two, but it is no slouch: Singapore Reinsurance has seen its shares deliver 51% in total gains. The company currently offers a dividend yield of 3.5%.

What has happened in the past is not a guarantee of the future. But looking back can give us clues on what a five-year winning stock could look like. And as we’ve seen above, it can come from sleepy industries such as insurance.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.